How to Protect Yourself from Wrongful Discharge Litigation by Former Employees

Wrongful discharge cases remain a mainstay of litigation against employers. Even more sobering is the fact that plaintiffs win most wrongful discharge suits that reach a jury trial largely because juries tend to favor employees over employers. How does a company protect itself? In short, protection comes from preventive action. Here are some key principles to bear in mind:

Review all company recruiting and orientation literature to ensure that no statements, implicitly or explicitly, guarantee employment. Be especially careful about using terminology in employee literature and in conversations with employees (especially prior to hiring) that suggests an increased level of job security beyond employment-at-will, such as words like permanent.

Courts have held that terms like this, which relate to duration of employment, can create an implied contract of employment through normal retirement age. If you need to differentiate between classes of employees, regular or full time are better terms.

The term probationary should be used with caution for similar reasons; some courts have concluded that, after an employee is no longer on probation, the employee has moved into a more secure employment relationship such that the employer must have good cause to terminate the employee (and can no longer terminate at will).

Train managers to maintain careful, detailed records of all performance problems and the disciplinary actions that have been taken in response to those problems. Keep in mind that the verdict in many wrongful discharge suits hinges on whether the jury believes that the discharged employee was given fair warning. Juries don’t like it when they think an employee was surprised when terminated.

Make sure that all disciplinary and dismissal procedures are handled by the book. This means in a manner consistent with your company’s stated disciplinary and termination policy. To be safe, your disciplinary and dismissal procedures should include a clause permitting the company to skip disciplinary steps or to impose more severe discipline or termination as circumstances warrant.

Make sure that all the managers and supervisors in your company are well versed in your company’s disciplinary and termination procedures. Train them and confer with them on a regular basis to ensure that they’re following procedures. If you discover that they aren’t, talk with them immediately, letting them know emphatically that failure to follow proper disciplinary and termination procedures is unacceptable and can prove extremely costly.

Be aware of how your actions may be misconstrued. Be sensitive to the possibility that an employee who leaves your company voluntarily as a result of a change in assignment or work practices may be able to convince a jury that the change in assignment or work practices was a deliberate attempt on your company’s part to force the employee to quit.